LONDON (Reuters) – Britain’s economy shrank in November for the first time since the initial COVID-19 lockdown last spring, hit by a tightening of social-distancing rules.
The 2.6% monthly decline was much smaller than most analysts expected – a Reuters poll had pointed to a 5.7% contraction – but several economists said Britain was still likely to suffer a double-dip recession.
Britain’s economy, which shrank more sharply than any other major advanced economy in the first half of 2020, is now 8.5% smaller than it was before the start of the coronavirus pandemic in February.
“It’s clear things will get harder before they get better and today’s figures highlight the scale of the challenge we face,” finance minister Rishi Sunak said.
But the roll-out of vaccines in Britain – which has been faster than elsewhere in Europe – was a reason to be hopeful, Sunak said.
Several economists warned that Britain was still on course for renewed recession, with the economy likely to shrink in both the final quarter of 2020 and the first three months of 2021.
“A third lockdown means that a double-dip recession in the first quarter of this year may be inevitable, particularly if the current post-Brexit disruption persists through the quarter,” said Suren Thiru, head of economics at the British Chambers of Commerce.
The scale of the hit to the economy in November was much smaller than in the first lockdown last year, something the Office for National Statistics attributed to businesses adjusting to social-distancing rules and schools remaining open.
But with a third, tougher lockdown now in place, and the impact of the country’s new, less open trading relationship with the European Union also a drag on business, the country is facing major challenges in early 2021.
BoE Governor Andrew Bailey said this week that it was too soon to say if further stimulus would be needed after the central bank ramped up its bond-buying programme to almost 900 billion pounds ($1.23 trillion) in November.
Friday’s data showed Britain’s economy in November was 8.9% smaller than a year earlier, a smaller drop than the 12.1% fall forecast in a Reuters poll. In October the economy had been 6.8% smaller than a year before.
At its lowest point in April, when many businesses closed temporarily, output was a record 25% below its year-ago level.
November’s downturn was led by the services sector, where output fell 3.4% from October as pubs, restaurants, non-essential shops and many other consumer services businesses had to shut as part of a four-week lockdown in England and similar measures in other parts of the United Kingdom.
Part of the scale of the hit to Britain’s economy in 2020 reflects a decision by the ONS to take account of disruption to routine medical care and schooling due to COVID-19, an approach which not all countries’ statistics agencies have taken.
BoE Deputy Governor Ben Broadbent has estimated this factor accounted for a quarter of the almost 9% annual drop in output recorded for the third quarter of 2020.
($1 = 0.7316 pounds)
(Reporting by David Milliken; Editing by William Schomberg, Kate Holton and Alison Williams)
TORONTO – Strength in the base metal and technology sectors helped Canada’s main stock index gain almost 100 points on Friday, while U.S. stock markets also climbed higher.
The S&P/TSX composite index closed up 93.51 points at 23,568.65.
In New York, the Dow Jones industrial average was up 297.01 points at 41,393.78. The S&P 500 index was up 30.26 points at 5,626.02, while the Nasdaq composite was up 114.30 points at 17,683.98.
The Canadian dollar traded for 73.61 cents US compared with 73.58 cents US on Thursday.
The October crude oil contract was down 32 cents at US$68.65 per barrel and the October natural gas contract was down five cents at US$2.31 per mmBTU.
The December gold contract was up US$30.10 at US$2,610.70 an ounce and the December copper contract was up four cents US$4.24 a pound.
This report by The Canadian Press was first published Sept. 13, 2024.
OTTAWA – Statistics Canada says wholesale sales, excluding petroleum, petroleum products, and other hydrocarbons and excluding oilseed and grain, rose 0.4 per cent to $82.7 billion in July.
The increase came as sales in the miscellaneous subsector gained three per cent to reach $10.5 billion in July, helped by strength in the agriculture supplies industry group, which rose 9.2 per cent.
The food, beverage and tobacco subsector added 1.7 per cent to total $15 billion in July.
The personal and household goods subsector fell 2.5 per cent to $12.1 billion.
In volume terms, overall wholesale sales rose 0.5 per cent in July.
Statistics Canada started including oilseed and grain as well as the petroleum and petroleum products subsector as part of wholesale trade last year, but is excluding the data from monthly analysis until there is enough historical data.
This report by The Canadian Press was first published Sept. 13, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in the base metal and energy sectors, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 172.18 points at 23,383.35.
In New York, the Dow Jones industrial average was down 34.99 points at 40,826.72. The S&P 500 index was up 10.56 points at 5,564.69, while the Nasdaq composite was up 74.84 points at 17,470.37.
The Canadian dollar traded for 73.55 cents US compared with 73.59 cents US on Wednesday.
The October crude oil contract was up $2.00 at US$69.31 per barrel and the October natural gas contract was up five cents at US$2.32 per mmBTU.
The December gold contract was up US$40.00 at US$2,582.40 an ounce and the December copper contract was up six cents at US$4.20 a pound.
This report by The Canadian Press was first published Sept. 12, 2024.
